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Don't even think about going to a car dealership until you've read this
by Bradley B. • December 5, 2018


If you’re in the market for a new vehicle, you’re probably already imagining yourself behind the wheel of a cool new ride. Unfortunately, for many consumers, the feeling of excitement about getting a new set of wheels is tinged with the fear and uncertainty of interacting with a car dealership. That’s understandable considering the cost of cars these days. The average price of vehicle transaction in 2018 is about $37,000, according to Kelly Blue Book.

Thank goodness there’s a way to make sure you have the best possible dealership experience. And that’s by preparing well ahead of stepping foot on the dealership lot.

Step One: Choose the Model

The experience of walking into a dealership with absolute clarity about which car you want is extremely different than wandering around the showroom with a salesperson asking questions or leading you to vehicles that don’t necessarily match your needs, tastes, and budget. Here’s the good news: The process of selecting your desired model can be completed at a leisurely pace in the comfort of your own home.

There are countless, excellent websites to help you winnow down your selection from the 250 or so models currently available on the US market to a reasonable handful of candidate cars. Car shopping websites organize all the models by price and brand, as well as segments ranging from compacts and midsize sedans to SUVs and trucks. It’s important to distinguish between the type of vehicle you want versus the one you and your family needs. Perhaps you have an affinity for one brand’s style or another automaker’s reputation for reliability. Maybe fuel economy is the most important thing to you. Regardless, slow down. Read reviews and watch online videos. Speak to friends and family about their ownership experiences with models you have in mind. If you feel like it, go to your local dealership and take a test drive or two. But politely and firmly respond to any specific questions about your purchase with, “I’m not ready yet.”

After putting one or two specific models at the top of your list, it’s time to get realistic about the cost.

Do: Take your time to research all possible models

Don’t: Rush down to the dealership and shop on the spot

Step Two: Confirm Your Budget

There’s nothing that can ruin the dealership experience more than being in the presence of a car sales associate or manager and only then discovering that the car you set your heart on is too rich for your blood. There’s a way to avoid that, again, through preparation.

In devising your short list of desired models, you probably discovered the Manufactures Suggested Retail Price (MSRP) for those vehicles. The MSRP is the lowball base figure that does not take into consideration the complete purchase price, dealership fees, tax, and financing, as well as insurance, fuel, and maintenance. So it’s time to plug in the name of your desired models into Google while adding “Total Cost of Ownership.” Car and financial websites such as Edmunds, NerdWallet, and Bankrate have useful tools for researching a vehicle’s total cost of ownership (TCO).

The goal of this step is not to finalize the model or pinpoint the cost but to make sure you are in the right financial ballpark. Online TCO calculators and articles will help you itemize the amount of an upfront payment and the monthly payments for a car loan or lease. You should apply this rule of thumb: After putting down about 20-percent of the purchase price on a loan or lease, the amount for monthly payments, financing, insurance, fuel, and maintenance should be less than 10 percent of your income. If that’s not the case, go back to Step One and reconsider the models on your short list.

Do: Calculate the total cost of ownership on a monthly basis

Don’t: Assume that your desired model Is a good financial decision

Step Three: Choose All the Features

You’re getting closer, but there’s still a critical research step required before marching into the dealership. That’s because any specific model doesn’t come in just one flavor. For example, a 2019 Ford Fusion is available in five different trims.

Trim is the term used to describe the package of engine choices, creature comforts, and special tech features. The base $22,000 Fusion S has 175-horsepower four-cylinder engine but with each step up—say, to the SE, SEL, Titanium versions—increasing the price, power, and luxury features all the way to the top-of-the-line powerful, all-wheel-drive $33,900 Fusion V6 Sport. There are also hybrid and plug-in hybrid variants. Of course, you also need to decide on the interior and exterior colors, cloth versus leather seats, audio packages, and other features ranging from wheel sizes to a sunroof. The devil is in the details because some versions will have features that are critical to you and your family—like rear AC vents—while others add whiz-bang but expensive technology like automatic parking.

Each one of those trim, style and engine choices could have a major impact on cost and availability. In other words, you can’t just call or visit a dealership—much less negotiate a deal—by simply asking for the abstract, generic model. You need to be equipped with the car’s must-have features, as well as niceties, and the cost of each item.

Do: Decide the car you want down to the finest detail

Don’t: Accept whatever trim and engine choice Is sitting on the dealership lot

Step Four: Prepare Your Deal

Okay, by this time you have completed weeks or months of research. You know the precise make, model, trim, engine, and set of features that you want. This enables you to go back to the web and determine how much others are paying for that same vehicle. Many of the major car shopping websites now offer transparent pricing tools that identify an exact dollar amount that represents a good or great deal. Emblazon that target number in your brain. Have no fear that the dealer will make a profit. They wouldn’t make the deal if that were not the case.

Don’t get distracted by the mechanics of the buying process, fast-talking sales associates, the dynamics of a trade-in of your current car, or any dubious add-on features like extended warranties and paint protection. You can eliminate fumbling around at the dealership by assembling a neat package of your credit history, proof of car insurance, and likely payment method. Make sure you have your driver’s license on hand. Bring a calculator.

You can take a breath and feel good that you’ve done your homework.

Do: Know your price and prepare the necessary personal information

Don’t: Change your mind about your desired vehicle, trim choices or target price

Step Five: Choose the Dealership

Congrats! It’s finally time to consider which dealership to make the transaction. Because you’ve prepared for the visit, it doesn’t matter which specific dealer you use. It’s a good idea to have two or three in mind. You might call ahead to see which ones have the biggest inventory or pay sales associates on a flat rate rather than based on commission. It would be nice if the transaction took place close to home, but that’s not critical. Sometimes, dealerships away from big cities are more eager to make a deal. You can check online reviews for each facility. A clean, bright and well-maintained facility is a good sign.

As with the previous steps, take your time. It’s critical that you are willing to walk away if the dealership doesn’t have the precise vehicle you want or is not willing to meet your price. Be confident that without a doubt, you know your car and the target price is a good deal that others are receiving. Of course, expect the sales staff to try to negotiate. That’s when you say smile, say no thanks and walk away. They will either meet your terms or go to the next dealership on your list.

Dealerships that offer concierge delivery of the car earn bonus points. That’s a way to save the hours of discussions, waiting, and paperwork that usually occurs at the dealership.

In any event, remember that you are in the driver’s seat. You are armed with knowledge and have completed all the necessary preparation for a great dealership experience.

Do: Be ready to walk away if your terms aren’t met

Don’t: Make any sudden changes at the last minute